A US-based investment firm announced Tuesday that is purchasing Fresh & Easy Neighborhood Markets from the United Kingdom-based owner Tesco PLC, bringing years of uncertainty to a close.
The decision represents the best outcome for stakeholders, said Philip Clarke, Tesco Chief Executive Officer.“It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy,” Clark said.
In February, the threatened closure of the chain caused many loyal customers to start petitions urging that the stores remain open.
The grocery store chain first opened stores in U.S. in 2007, bringing about 200 stores to areas of the country such as California, Nevada, and Arizona. In late 2012, the company’s profitability strategy was not going according to plan, which forced it to close multiple stores. Some said the company’s primary competitor Trader Joe’s was too well established in the market; their customers were too loyal to change their food-buying habits without a very good reason. Others say it was related to personnel problems. Workers were rioting and demanding wage increases in 2011.
"It just became clear to us that the journey to sustainable returns was going to take too long," Clarke told reporters, according to Reuters. "It's likely but not certain that our presence in America will come to an end,” he said in late 2012.
Early Tuesday morning, that prophecy solidified. Yucaipa Companies LLC announced it would be fully acquiring the company within the next three months.
Ron Burkle, Managing Partner at Yucaipa, said Fresh & Easy has a tremendous foundation.
“Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience,” Burkle said. “Its dedicated employees and great base of customers give us a solid starting point to complete Tesco's vision with some changes that we think will make it even more relevant to today's consumer,” he said.
Yucapia Companies specializes in strategically repositioning the businesses it absorbs by changing the way they operate. Burkle said the Fresh & Easy shopping experience would continue to be a “next-generation convenience retail experience.”
Fresh & Easy is located at 1827 Ygnacio Valley Road in Walnut Creek.